The Baby Boomer generation, or those people born between 1946 and 1964, make up about 25 percent of the current U.S. population. Every day since 2011, 10,000 Baby Boomers turn 65 and are expected to do so until 2030.These numbers show how great an opportunity insurance agents have in selling Medicare supplement products. Greater, still, is the opportunity to sell these products when you partner with a Medicare FMO or Field Marketing Organization. Doing so means that commissions are paid directly to you as you help the elderly get the additional healthcare coverage they need.
Why Is It Smart Business to Sell Medicare Supplements?
Everyone knows the importance of getting Medicare coverage. Most people get Medicare Part A and B coverage, or “Original Medicare.” These plans cover most of a person’s healthcare needs, including hospital stays, doctor services, and preventative healthcare. Medicare Part D, meanwhile, covers a person’s prescription medication.Comprehensive as these plans might seem, though, they typically only cover about 80 percent of a person’s expenses. As a person gets older they are likely to be more frequently ill; their medical expenses, therefore, can quickly add up. This leaves them with hefty bills to pay that aren’t covered by their regular Medicare plans.
A Medicare supplement plan, or Medigap, is what fills the coverage gap in Original Medicare and Part D plans. It includes things like medical care when you travel outside the U.S.A. The elderly turn 65 years old, thereby qualifying for Medicare, they will likely actively look at other coverage options instead of paying out-of-pocket for the 20 percent that their regular plans do not cover.
Medicare supplement plans are private insurance plans standardized by the government. Medicare supplements come in Plans A, B, C, D, F, G K, L, M, and N, which should not be confused with the Part A, B, and D of Medicare coverage. When an elderly person acquires a supplement plan, they can eliminate the worry of hefty bills for their medical expenses that they would otherwise have to pay for themselves.
Medicare Part C, meanwhile, is also called a Medicare Advantage health plan. Instead of paying for Parts A, B, and D, you help your clients enroll for a Medicare Advantage policy, which commonly covers the same aspects of Parts A, B, and D plus additional services.
Since numerous people turn 65, daily – and a lot more will continue to reach that age as the rest of the Baby Boomer population ages – selling Medicare supplement insurance plans means you will not run out of clients in the foreseeable future.
Apart from the large market, there are other reasons you should consider selling Medicare supplement insurance plans:
It is the easiest-to-sell Medicare product.
There is neither certification or training required to sell Medicare supplement insurance. The only exception to this is one carrier, United Healthcare, requires training to sell their Medicare Supplements. You only need to obtain your health insurance license. Each state requires different qualifications to earn this, but the most common denominator is passing the state’s examination. After you get your health insurance license, you’re set to sell.
It has high-profit potential.
Sales from first-year commissions, as well as the annual residuals you’ll get by selling Medicare supplements, are high. After helping a client enroll in an insurance plan, agents receive an initial payment for the first year of that policy. Every year after that your client remains enrolled, you’ll receive a renewal commission. Medicare supplements provide ongoing compensation, so the income potential for agents is great.
It offers competitive rates.
As mentioned earlier, the coverage of Medicare supplement insurance is standardized across each plan for all providers. This means, whatever carrier a client chooses, they will get the same benefits. The only variation is in the premium costs. So, as an agent, you need to have the most competitive carriers to offer to your clients.
It lets you service your current clients.
If you’re already selling insurance policies, you might already have a book of business that you’ve built throughout your career. It’s likely that you have current clients or their relatives who are about to turn 65, or clients who are already qualified for Medicare supplemental insurance. If they’re going to buy a supplemental insurance policy anyway, it might as well be from an agent they already know and trust—you.
Of course, you must first know how to actually sell Medicare supplemental insurance plans to target customers.
Getting Started with Selling Medicare Supplemental Insurance
On top of the previously-mentioned benefit of working with an FMO, here are other things that you need to do to be an effective Medicare supplement insurance agent.
Learn about the basics of Medicare
This should be a given, considering you’d have needed much of this knowledge when taking your health insurance exam. Still, it’s important to keep up with the newest in Medicare and the changes within the Centers for Medicare and Medicaid Services (CMS). For over 50 years, Medicare has undergone several legislative changes. These changes have made the program more complex to navigate, so agents and beneficiaries, alike, may get confused.
Though created mostly for the benefit of Medicare members, the handbook can make it easier for an agent like you to explain the different concepts of the government’s health insurance program. Clients will want to speak to an insurance agent who’s knowledgeable and easy to understand rather than to someone who speaks in jargon and is only looking to score an easy sale.
Pro Tip: This is YOUR chance to become the expert in the client's eyes and to set yourself apart from all the other insurance agents.
Buy an Errors and Omissions insurance policy
Usually, insurance agents have a general liability insurance policy, which covers bodily injury, property damage, or advertising injury claims. If you make a mistake on a Medicare supplement policy, rarely will it lead to said claims, so a general liability policy will not do you much good.However, there are mistakes you might make as an agent, say because of lack of expertise or disorganization and forgetfulness – and those missteps can cost your clients. What’s worse, mistakes of omission or error could potentially result in negligence claims against you. If your client decides to file a lawsuit, an Errors and Omissions (E&O) insurance policy would help you pay for your legal defense fees. E&O insurance also helps professionals like insurance agents and others in similar service- and advice-oriented industries pay for damages awarded to a client as a result of the lawsuit.
Get AHIP certification to sell more than just Medicare supplemental plans
Earlier, we established how selling Medicare supplements is relatively easy because it requires no certification. If you want to widen your range, though, you should also offer your clients the previously-mentioned Medicare Advantage plans.
The American Health Insurance Plans (AHIP) is an organization that represents thousands of companies that offer health insurance to Americans. Since the government administers Medicare Advantage plans, they need to establish rules for selling them. AHIP is the organization that enforces these rules.
Unlike selling Medicare supplement plans, you need to be AHIP-certified to sell Medicare Advantage. Insurance agents like you must complete AHIP’s Medicare training courses so the organization can make sure that you’re compliant with the latest CMS regulations.
Identify the best places to target…Medicare Supplement clients
According to United Healthcare, estimates that around 44 million, or 15 percent of the U.S. population, are Medicare beneficiaries. By 2030, this number is expected to reach 79 million as more Baby Boomers reach the age of 65.However, these numbers vary per state. For example, there are 1.2 million Original Medicare beneficiaries in Virginia, but only 326,000 in West Virginia. By knowing the total number of Medicare beneficiaries in different states, you can identify in which ones you’ll have a bigger market.
...And learn how to reach potential clients there
Once you’ve identified the places that are ripe with clients, you can help those people fill the gaps in their Original Medicare plans by selling Medicare supplements perhaps over the phone.A 2017 survey of Medicare-eligible people aged 65 and over revealed that only 33 percent of older adults shop around for the best deals on their Medicare plans. There are more adults who look for better grocery deals (54%) and home or car insurance and cable or internet plans (40%). The reason for their reluctance to look for better Medicare plans? Anxiety over plans that seem too complicated.
This is where your knowledge of Medicare comes in. By being an effective Medicare supplement insurance agent, you can make concise and easy-to-understand presentations over the phone. With you reaching out to them, they’re more likely to understand how much they can save on insurance copayments and other out-of-pocket medical expenses with a Medicare supplement insurance policy.
Learning how to sell Medicare supplement products over the phone is beneficial to you as well because you can reach potential clients in less time, with less money, and not as much manual labor. If, for example, you’re based in Virginia but there’s a huge market for Medicare supplement plans in California, you don’t have to cross the country to personally get to your potential clients. Without leaving your desk, you can contact them on the phone and subsequently educate them on the Medicare supplements in the hopes of selling a product.
Know when people are most likely to apply
Your familiarity with the Medicare supplement market is as crucial as your knowledge about the product. That is why you must be familiar with the two instances in which a Medicare beneficiary can apply for the supplement insurance.
Here are two ways to enroll:
- During Open Enrollment Period - The Medigap open enrollment period starts on the first day of the month a client turns 65 and enrolled in Part B, and lasts for six months. Even if your client has a pre-existing health condition, they are not subject to underwriting and therefore cannot be penalized.
- Outside Open Enrollment Period - Seniors who are eligible for Medicare coverage can still apply for supplement insurance after the open enrollment period. However if you did not pick up Part B when you should have, you might have to pay for the Part B late enrollment penalty fee, unless you meet certain conditions that allow you to sign up during a Guaranteed Issue Period/Right.
According to Medicare.gov, “You'll have to pay this penalty for as long as you have Part B. Your monthly premium for Part B may go up 10% of the standard premium for each full 12-month period that you could have had Part B, but didn't sign up for it.”
Recognize Which Supplemental Plans are The Best For Your Clients
One of the most frequently asked questions of potential clients is about which Medicare supplemental plans they should get. With ten standardized plans (A, B, C, D, F, G, K, L, M, and N) and one high-deductible plan to choose from, it’s understandably confusing for your clients. So, it’s prudent to introduce the plans that have the most benefit to your clients, such as the ones below.
Medicare Supplement Plan F
The most extensive Medicare supplemental plan you can offer your clients is Plan F. It covers all the gaps in Original Medicare, so they don’t have to shell out on deductibles or copays while they have this plan. Plan F also comes with foreign travel emergency benefits.However, at the start of 2020, you can no longer sell Plan F to new Medicare enrollees because Congress has eliminated this option. When the time comes, you might want to offer the next plan instead.
Medicare Supplement Plan G
Medicare Plan G offers similar benefits to Plan F. The difference is your client will have to pay their own Part B deductible, which currently costs $185. People who require frequent doctor visits due to chronic illness will benefit from Plan G the most because they don’t have to spend on copays for these visits.
Medicare Supplement Plan N
Plan N is the latest Medicare supplemental plan, rolled out in 2010. It offers the same benefits as Plan G except your clients might have a copay up to $20 for each medical office visit and $50 for each ER visit. If the healthcare provider charges excess fees, it’s the client’s responsibility to pay for them, though this rarely happens.
Medicare Supplement High-Deductible Plan F
With high-deductible Plan F, Medicare pays 80 percent of your client’s outpatient expenses. The client will have to cover the rest, as well as Parts A and B deductibles. But, if their spending goes over $2,300 in a year, the plan covers 100 percent of the expenses, just like a regular Plan F would. Another similarity to a regular Plan F is that this option will no longer be available come 2020. Instead, it will be replaced with high-deductible Plan G.
Are You Ready To Make Easy Money Selling Medicare Supplements?
As we said before, selling Medicare supplements is easy if you know what you’re doing, are determined to succeed, and have all the resources you need. You can have and be all that by working with TR King Insurance Marketing as your FMO.
Here, we provide you with not just basic assistance, but also a winning plan of action that will help you reach your goals as a Medicare insurance agent.
Key Takeaways In This Article
- Save time, buy Medicare supplement leads to get the ball rolling fast.
- Spend time researching cms.gov to find the right areas to target for Medicare supplement business.
- Know what you sell, building your knowledge leads to confidence during the sales process.
- Medicare supplements can be sold online and over the phone.
Over to You
We'd love to hear your thoughts in the comments below on:
- Do you purchase medicare supplement leads, why, and which vendors?
- What opening lines do you use to sell Medicare supplements over the phone and why?
- What marketing methods are you currently using to sell Medicare (that we didn't mention here)?
If you have any questions, please leave a comment below. We will carefully read each one of them. Happy Selling!